NIBSS: Cyber-insurance necessary to mitigate risks in digital ecosystem

As Nigeria embraces digitization, the risks that come with it pose a significant threat to the growth of the digital ecosystem. Ngover Iyhembe Nwankwo, the Executive Director of Business Development at the Nigeria Interbank Settlement System (NIBSS), emphasized the crucial need for cyber-insurance to address the impacts of these risks. Speaking with CNBC Africa at the RMB Nigeria Economic Forum, Iyhembe Nwankwo underscored the importance of collaboration in propelling the ecosystem forward. With the surge in digital transactions and the increasing adoption of cashless initiatives, Nigeria is witnessing a transformation in the way people engage with financial services. Individuals can now seamlessly open accounts online, transfer funds, and access various products and services digitally. While these technological advancements are laudable, they also expose individuals and organizations to cyber threats. These threats, ranging from data breaches to online fraud, necessitate proactive measures to safeguard against potential risks. During the discussion, Iyhembe Nwankwo highlighted the significance of collaboration not only within the financial sector but across the entire ecosystem. NIBSS plays a pivotal role in connecting over 1,000 institutions, including banks, microfinance banks, and fintech companies. Such extensive connectivity underscores the need for a unified approach in identifying threats and devising strategies to mitigate risks collectively. Leveraging unique identifiers like the Bank Verification Number (BVN), Nigeria has the foundational elements to enhance collaboration and fortify the ecosystem's resilience. Moreover, Iyhembe Nwankwo stressed the importance of cyber insurance as a critical component in mitigating cyber risks. As digital activities continue to proliferate, the likelihood of cyber incidents also escalates. Cyber insurance offers a safety net for organizations by providing coverage against potential cyber-attacks and data breaches. While this concept is well-established in other jurisdictions, Nigeria is still in the nascent stages of embracing cyber insurance. The evolving landscape underscores the imperative for businesses to enhance their risk management frameworks and invest in adequate insurance coverage to navigate the digital terrain securely. Addressing the regulatory aspect of digital innovation, Iyhembe Nwankwo acknowledged the inherent challenge of aligning regulations with the rapidly evolving technological landscape. He emphasized the importance of regulatory frameworks that support innovation without stifling progress. Collaborative efforts between industry players and regulators are essential to strike a balance that fosters growth while ensuring compliance with regulatory standards. By engaging in constructive dialogues and co-creating regulatory measures, stakeholders can collectively contribute to a conducive environment for innovation and sustainable development. Reflecting on the key takeaways from the panel discussions at the RMB Nigeria Economic Forum, Iyhembe Nwankwo highlighted the vital role of infrastructure and governance in driving Nigeria's economic progress. The revitalization of critical assets by organizations like Mophie signifies a step towards enhancing operational efficiency and aligning resources with national objectives. Additionally, the forum served as a platform to exchange insights, garner optimism, and showcase the tangible results of Nigeria's economic reforms. In conclusion, as Nigeria traverses the digital landscape, the implementation of cyber-insurance, reinforced collaboration, and adaptive regulatory frameworks are pivotal in fortifying the digital ecosystem. By embracing these pillars, Nigeria can mitigate risks, foster innovation, and pave the way for sustainable growth in the digital era.